Dun & Bradstreet’s (D&B) roots go back to 1841 when Lewis Tappan recognized the need for a centralized credit reporting system and formed The Mercantile Agency in NYC.
Thanks for the great and thorough analysis! I have done some work on DNB as well. The one thing I haven't yet got my head around, is that how they're going to reduce the big pile of debt? Personally I think it's a drag on the valuation and also not good for shareholders in the long run. The interest expenses consume much of the opeational cash flow. Any thoughts on how they could perform the pay down of the debt... just many years of waiting?
I imagine they will run this business with fairly high leverage since it is so stable. But I do expect they'll pay down some it it by chipping away quarter after quarter. I don't foresee as many acquisitions in the future as in the recent past. Capex ought to decline too as the "catch up" phase ends. Those factors will make more OCF available for debt pay down. Since they IPO they've done a good job of refinancing their debt to lower its cost. The debt is probably a drag on valuation. As it's paid down more of D&B's EV will accrue to equity holders which should cause the stock and P/E multiple to rise. Thanks for reading!
Thanks for the great and thorough analysis! I have done some work on DNB as well. The one thing I haven't yet got my head around, is that how they're going to reduce the big pile of debt? Personally I think it's a drag on the valuation and also not good for shareholders in the long run. The interest expenses consume much of the opeational cash flow. Any thoughts on how they could perform the pay down of the debt... just many years of waiting?
I imagine they will run this business with fairly high leverage since it is so stable. But I do expect they'll pay down some it it by chipping away quarter after quarter. I don't foresee as many acquisitions in the future as in the recent past. Capex ought to decline too as the "catch up" phase ends. Those factors will make more OCF available for debt pay down. Since they IPO they've done a good job of refinancing their debt to lower its cost. The debt is probably a drag on valuation. As it's paid down more of D&B's EV will accrue to equity holders which should cause the stock and P/E multiple to rise. Thanks for reading!